SABAM (Société Belge des Auteurs, Compositeurs et Editeurs), the Belgian collecting society for music royalties, is in the spotlight again. A few months after the Scarlet/SABAM case, the Court of Justice of the European Union (CJEU) has released a new decision on the legality of filtering systems on the Internet, this time with regard to filtering of content stored on web services.
Today, the Court of Justice of the European Union (CJEU) ruled that a social network “cannot be obliged to install a general filtering system, covering all its users, in order to prevent the unlawful use of musical and audio-visual work”.
SABAM brought the social network Netlog to court to impose an injunction requiring the installation of filtering systems aimed at the prevention of infringements committed by its Belgian members (around 2 million consumers) on its website.
A social network is a set of online communication tools that allow the creation and exchange of user-generated content. Netlog is an online platform, where members can create their own webpage with a blog, pictures, playlists, videos… and as such considered as a social network, and a hosting provider. SABAM asked the Belgian Court to impose a penalty payment of 1000 €/day if the injunction was not respected. Much user-generated content re-works copyrighted material to produce new creations, making assessments of legality particularly difficult and particularly inappropriate for automatic filtering systems.
On 10 July 2010, the Brussels Court of First Instance denied the penalty payment request and submitted a question for preliminary ruling. The Court of First Instance asked the European Court whether or not a national judge may issue an injunction against a hosting service provider to filter most of the information stored on its servers in order to identify electronic files containing musical, cinematographic or audio-visual work, and subsequently to block the exchange of such files. The injunction that SABAM requested covered all Netlog customers, in abstracto and as a preventive measure.
In today’s decision, the Court decided that it is against European law to order such a measure. The generality and broadness of such an injunction is against freedom of communication, privacy rights and freedom to conduct business.
Is this a new win for fundamental freedoms
Particularly now, in a political climate where the foundations of the current Internet are at stake, the European judges have re-emphasised the importance of not overburdening communication tools with restrictive technologies. This is crucial to protect the fundamental rights value of the Internet as well as its economic significance.
For the second time in a just a few months, thanks to actions taken by SABAM have led the CJEU to underline the importance of an open and free Internet and the respect for fundamental freedoms, such as the freedom to,freedom of communication privacy and the freedom to conduct business.
What is the difference between the Scarlet case and the Netlog decision?
The wording of the questions was the same in both cases except that the Netlog decision specifically addresses the situation of hosting providers, while the Scarlet case involved Internet access providers.
According to the e-Commerce Directive, a hosting provider is an information society service whose service consists of the storage of information provided by the recipient of the service.1 In the Scarlet case, the issue was about an access provider, a “mere conduit” (a service consisting of “transmission” in a communication network) in the language of the E-Commerce Directive.
SABAM was asking for large-scale and open-ended filtering of content stored in online services. In the Scarlet case, it was dealing with the policing of the circulation of content on the net.
What did the CJEU base its decision on?
The European Court of Justice reused the balancing test established in the Scarlet/SABAM (C-70/10), and based its decision on the E-Commerce Directive (2000/31/EC) on the Charter of Fundamental Rights.
The European judges balanced the fundamental rights at stake when injunctions of unlimited monitoring involving hosting providers is requested.
The ruling balances the freedom of communication, the freedom to conduct business, the right to privacy with the protection of intellectual property, concluding that the business freedom of hosting providers and the interests of the society as a whole can not counterbalanced with the interests of one part of industry (the rightsholders).
What will change for hosting providers?
The hosting providers’ situation is staying the same. They cannot be obliged to monitor, filter and block alleged infringing content.
However, it does not mean that the hosting providers will never bear any liability. Hosting provider can still be held liable for illegal content that they are hosting if they had actual knowledge of the presence of such content hosted on their services and do not act expeditiously to remove it.
What consequences will this decision have for the Internet?
The essence of freedom of communication on the Internet was at risk. The decision is a relief for everyone who defends and supports freedom of communication and protects the social and economic impact of the open, free and neutral Internet.
Why is it important to have a judge decide on the balancing test?
It is important to have the judiciary involved in the balancing test to have a fair and impartial assessment. It is the best way to be sure that safeguards are properly applied. As the UN Special Rapporteur on Freedom of Expression stated in his report last year “intermediaries, as private entities, are not best placed to make the determination of whether a particular content is illegal, which requires careful balancing of competing interests and consideration of defences”.
Having a due process of law is important not only for citizens but also for businesses, to evolve in an innovation-friendly environment, where competition is preserved.
What does this ruling mean in the context of proposals such as ACTA and IPRED?
The European court decision underlines the importance of the rule of law. Acting within the rule of law ensures the respect of important safeguards. Those safeguards would most probably disappear, or at least be inadequately implemented, if enforcement were put in the hands of private companies through a “voluntary” cooperation mechanism.
Privatised enforcement undermines the rule of law and currently the tendency is to push towards industry “cooperation” without having proper safeguards. Such systems are pushed in ACTA (Anti-Counterfeiting Trade Agreement) and are likely to be in the future revision of the IPRED (Intellectual Property Enforcement Directive).
What does the ruling mean at an international level for freedom of communication?
As Europe is traditionally seen as an example for fundamental freedoms especially freedom of speech, it was important to have a decision protecting freedom of communication, and freedom of expression as a global example of best practice.